Clean buildings tax credit

The clean buildings tax credit is a refundable income tax credit for qualifying retrofits that improve the energy efficiency of eligible commercial and multi-unit residential buildings with four or more units. The retrofit must improve the energy efficiency of an eligible building and meet energy-use targets. The credit amount is 5 percent of qualifying expenditures paid on the retrofit.

You must make or incur the expenditures under the terms of an agreement entered into after February 22, 2022 and paid before April 1, 2025.

Budget 2024 proposes to extend the deadline to apply for a retrofit certificate by six months, from March 31, 2027 to September 30, 2027.

Learn more about:

• Who can claim the tax credit
• Eligible buildings
• Qualifying retrofits
• Qualifying expenditures
• Certifying the retrofit
• Submitting documents online
• Claiming the credit
• Legislation

Who can claim the tax credit

To claim the clean buildings tax credit you must be:

• A corporation with a permanent establishment in B.C., or
• An individual, including a trust, that:
  • Is resident in B.C., or
  • Is not resident in B.C. but has income earned in B.C. for income tax purposes.

You must meet these requirements in the tax year you are claiming the credit. 

Entities that are exempt from BC income tax are not eligible for the clean buildings tax credit.

Eligible buildings

To be eligible, the building being retrofitted must be located in B.C. and wholly consist of one or more of the following types:

• A multi-unit residential building consisting of four or more dwellings
• Accommodation (only includes buildings classified as class 6 property under the Assessment Act)
• A college or university
• Food services
• Hospital
• Logistics and warehousing
• Long-term care
• Offices
• Retail – food
• Retail – other
• Schools
• Other buildings classified as class 6 or class 8 property under the Assessment Act

Qualifying retrofits

A qualifying retrofit is an alteration or renovation of an eligible building that is:

• Undertaken for the purpose of reducing the energy use intensity (EUI) of the building. Learn more about the energy targets and how to calculate them
• Certified by the Ministry of Finance, and
• Completed before April 1, 2026

The qualifying expenditures you incur as part of the retrofit are what’s used to calculate your tax credit amount.

Qualifying expenditures

Only the expenditures that are directly attributable to the retrofit qualify.

You must make or incur the expenditures under the terms of an agreement entered into after February 22, 2022 and paid before April 1, 2025. 

Keep in mind:

• You can’t include expenditures that another person included in calculating their clean buildings tax credit. If you are a member of a partnership, you may include your appropriate portion of the partnership’s qualifying expenditures
• The expenditure is reduced by any payments received under a program designed to provide assistance with the cost of alteration or renovation of the building or the land it is on

Examples of qualifying expenditures and exclusions are listed below. 

Certifying your retrofit

Before you can claim the credit on your income tax return for the year, the retrofit must be certified with the Ministry of Finance. This is a two-step process you can start 12 months after the retrofit is finished.

You must complete all procedures for Step 1 before you can start Step 2.

Step 1: Have a qualified person submit information about the retrofit

The first step is hiring a qualified person to confirm the target energy use intensity and the energy use calculations of the building before and after the retrofit, showing that the retrofit has reduced energy usage below the target.

Have the qualified person submit this information to us online. 

Submit Step 1 of the application

To complete the form, they’ll need:

• Address of the building that received the retrofit
• Parcel identification (PID) of the building
• Type of building
• Floor area of the building
• Climate zone of the building
• Type and amount of fuel or energy used by the building for a year ending within the 12 months before the retrofit began
• Type and amount of fuel or energy used by the building for a year beginning after the retrofit is completed (and ending on or before March 31, 2027)
• An electronic copy of their report containing:
  • Information used to determine energy use intensity
  • Certification that the retrofit has reduced the energy use intensity, and
  • A description of what the retrofit included

After they submit the information, they’ll receive a confirmation number to provide to you for Step 2.

Step 2: Eligible applicant applies for tax credit certificate

The next step is applying for the certificate online. 

Only one application can be submitted per retrofit. When you apply, include all qualified taxpayers who intend to claim the credit for that retrofit.

Submit Step 2 of the application

To complete the form, you’ll need:

• Confirmation number from Step 1
• Parcel identification (PID) of the building
• Cost of the retrofit
• Business Number (BN), last 4 digits of Social Insurance Number (SIN), or Trust Account Number (TAN) for all taxpayers claiming the credit
  • If there’s a multi-tiered partnership arrangement, you’ll need to provide the information for the partners
• Full legal name of all taxpayers claiming the credit

Once approved, each taxpayer listed in the application will receive a letter with a unique certificate number. The letter will also include an estimate of the tax credit amount based on information that was provided in the application.

Note: Receiving certification means your retrofit is eligible, but we do not determine whether your expenditures are eligible. The Canada Revenue Agency (CRA) may audit your expenditures. 

Sending supporting documents

After you apply, we may ask you to submit additional documents to support your application. You can send them to us using our secure online document submission portal. 

Submit documents online

Claiming the credit

The clean buildings tax credit is claimed on your income tax return filed with the Canada Revenue Agency (CRA).

You must claim the credit no later than 18 months after the end of the tax year after the tax year in which the retrofit was completed.

Legislation

The following legislation applies to the clean buildings tax credit:

• Income Tax Act, Part 16
• Clean Buildings Tax Credit Regulation